Assuring Your Financial Performance is on the Right Track

In an agreed-upon procedure engagement, the client requests that we, as independent auditors, conduct very specific procedures or tests on a business process. The procedures are agreed upon in advance and are designed to help third parties evaluate some aspect of the business. The nature of these engagements can vary widely and could range from performing calculations to looking at the procedures of work performed by others to inspection of certain types of transactions. At the conclusion, PBMares issues a report that does not contain any opinions. Once you have considered the results, we are available to advise you.

Financial statements are formal records of your business’ financial activities. They provide a clear picture of your company’s overall financial health and performance to interested parties, such as lenders or investors. No matter which level of assurance you need for your stakeholders, we can help. The assurance team assists with:

• Audits
  This is the highest level of financial statement review. They verify whether the information in the financial statement is materially correct and in conformance with Generally Accepted Accounting Principles (GAAP) or other reporting frameworks. Generally, audits are performed at the request of third parties such as lenders and investors.
• Reviews
  Provide limited assurance your financial statements are materially correct and state that we are not aware of any material modifications that need to be made to bring them into compliance with GAAP or other reporting frameworks. As with financial statements and audits, reviews are conducted at the request of outside third parties.
• Compilation reports
  Typically, these are performed when a higher level of service on the financial statements is not required. They state that the information in the financial statements is the representation of management and we have not expressed an opinion about the content.

There are no crystal balls. Understanding what might happen in the future requires examining a series of “what-if” scenarios and coming up with one that visualizes the best and worst possibilities so you can plan for them. Whether you want to forecast how quickly your business will grow, when to sell it, what your expenses are likely to be in 10 years or how much you will have for retirement, forecasts and projections provide a realistic framework you can use to formulate a workable plan.

Is your data safe? You rely on the internet and the cloud in your business and that makes you vulnerable to attacks from outside parties. PBMares’ professionals are experienced in reviewing the security controls you have in place for your internal and external systems, identifying areas of high risk and formulating plans to mitigate your vulnerabilities.

Do you have an internal audit team? Is the team large enough to meet all of your internal audit needs? If not, co-sourcing or outsourcing is a good way to get the support you need in the areas most critical to your business. Whether you need people to support your team or a team to handle the entire function, we can make sure you are complying with your policies and procedures and that your business is effective in the areas tested.

Internal controls are essentially systems of checks and balances. These policies and procedures protect your assets and help ensure your accounting is accurate. Having strong controls in place is critical. PBMares has the expertise to review your processes and procedures and evaluate them for efficiency and risk level. By looking at the roles and responsibilities of your team and how work is recorded and approved, we can ensure that management has the appropriate role in governing the business. Among the areas we can help you with are workflow, purchasing and cybersecurity.

The AICPA requires member firms to be reviewed every three years by a firm that is enrolled in its Peer Review Program. The review provides an independent review of the firm’s quality control processes and procedures. The goal is ensuring that firms comply with professional standards. While PBMares recognizes the sensitive nature of these reviews, we approach it professionally and from the perspective of helping firms be better firms.

Individuals, especially those with $1 million or more in assets, often fail to look at their overall financial position. Having a financial statement that outlines their assets and liabilities puts things in perspective and allows them to plan ways to increase their wealth and preserve it for future generations.

PBMares is registered with the PCAOB, which gives us the ability to assist our public company clients with their audit and tax needs as well and any other compliance needs. We work with U.S. and international clients on these matters. Among the services we assist with are:

• Initial and secondary public offerings
• SEC registration and compliance
• Tax services
• Special projects

Most businesses need to comply with certain laws and regulations. Some industries, like financial institutions, government contractors and publicly traded companies, are highly regulated. They have to know when the requirements change because the consequences of noncompliance can be severe. Any penalties can be avoided easily by engaging a firm with experience in your industry to assess and evaluate the processes and procedures your company has in place to make sure you are in compliance.

Many contracts contain periodic review clauses. These clauses usually are built around such diverse matters as key employee compensation, purchase price adjustments and change orders. It is important to have these types of contract provisions looked at by an expert to ensure you get what you are entitled to.

As an organization providing outsourced services to other businesses, you will likely be required to prove that the internal controls you have in place are valid. Driven by compliance or regulations, a single report is used to satisfy multiple requests your business may receive from your customers and prospects. The AICPA has created a framework consisting of multiple reporting options to allow you to validate the applicable business and operational controls supporting the services your provide. Service organizations look to PBMares to help create reports on internal controls, including:

• SOC 1 Reports, Type 1 & Type 2: Evaluates the effectiveness of controls used at a service organization on the entities’ financial statement.
• SOC 2 Reports, Type 1 & Type 2: Used to meet the needs of users that need detailed information and assurance about the controls at a service organization related to security, availability and processing integrity of the systems used.
• SOC 3 Reports: A general use report for those who need assurance about controls of a service organization, but do not have the ability to make use of a SOC 2.
• SOC for Cybersecurity Reports: Helps organizations communicate useful information about the effectiveness of their cybersecurity risk management programs.
• SOC Readiness Assessments: Perform some testing, but no report is issued, as a way to help an organization determine if they are ready for a SOC test.

Accounting standards are principles that standardize how transactions are recognized, measured, presented and disclosed in financial statements. GAAP is the compilation of these standards, which are issued by Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB). When the standards change, companies need to adapt how they report transactions to comply. Our experts can guide you so you can be sure you are in compliance with all applicable standards.